Petrol Price in Pakistan-16 March 2023

Petrol Price in Pakistan-16 March 2023
A line at a petrol filling station after news out

 Petrol prices in Pakistan have been increased by 5 rupees and diesel prices to 13 rupees once again by today 16 march 2023. The government has announced the hipe in petroleum prices to facilitate inflation to the citizens for the month of Ramadan.   

Petrol price in Pakistan-from 16 March 2023

ProductOld prices w.e.f
01.03.2023		New prices
w.e.f
16.03.2023		Increase
Petrol267272+5
High-speed diesel280293+13
Kerosene187.73190.29+2.56
Light diesel oil184.68184.68Nil

The following information can be helpful if you're curious about how much petroleum products cost per litre in Pakistan.

Petroleum Levy in Pakistan

This is according to the recent (w.e.f. February 16, 2023) tax regime:

Product

PL (Rs.)

GST (Rs.)

IFEM (Rs.)

OMM (Rs.)

DC (Rs.)

PSOERA (Rs.)

Petrol

50

0

3.42

5

7

9.92

High-Speed Diesel

40

0

6.76

5

7

13.12

Kerosene Oil

0.32

0

–

–

–

–

Light Diesel

27.25

0

–

–

–

–

 

Glossary index

• PL – Petroleum Levy or Petroleum Development Levy

• GST – General Sales Tax

• IFEM – Inland Freight Equalization Margin

• OMM – Oil Marketing Margins

• DC – Dealers’ Commission

• PSOERA – Pakistan State Oil Exchange Rate Adjustment

 

Petrol Price in Pakistan: Analysis

Despite facing pressure from multiple sources, the government has decided not to levy the General Sales Tax (GST) on petroleum products at the moment. This move could potentially cause a delay in the disbursement of the much-awaited tranche from the International Monetary Fund (IMF), which may further complicate matters in the economic arena. Additionally, it is regrettable that the prices of High-Speed Diesel have not been reduced, despite the fact that demand for it is expected to increase with the upcoming harvest of Rabi crops.

This alone could lead to a rise in the prices of wheat and other essential crops in the near future. Food inflation is already approaching 40%, and this could exacerbate the situation. If the government had to choose between the two, rather than reducing the price of petrol, it should have considered lowering diesel prices instead.

 

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Petrol price and COVID-19

The global petroleum industry was severely impacted by the COVID-19 pandemic, with a significant drop in fuel demand leading to an oversupply of oil and gas. Pakistan was no exception, with fuel consumption decreasing by 11% during the June-July fiscal year 2019-2020 due to strict lockdowns and people staying indoors to avoid the virus.

Work-from-home policies were implemented by many businesses, leading to the lowest petroleum prices in Pakistan in the past 10-12 years. However, strict lockdown measures also led to fuel shortages in some parts of the country. These crises were short-lived, as the government shifted towards more sustainable lockdown policies and allowed large-scale industries to resume operations while adhering to COVID-19 SOPs. This led to a significant increase in petrol prices by the end of June 2020.

Due to the uncertain economic situation and rising inflation, petroleum prices are expected to continue increasing in the coming months, with the current petrol price in Pakistan is PKR 267. The Oil and GasRegulatory Authority (OGRA), founded by the Government of Pakistan in 2002, is responsible for regulating the fuel sector in the country. OGRA makes recommendations on changes to fuel prices based on demand, supply, and other key resources, with approval from the Prime Minister of Pakistan required for implementation. Negotiations between the government and OGRA are also an important part of the process of finalizing prices. Stay updated on the fluctuating rates of petroleum products in the country by checking back regularly.

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